New law on car insurance
PORTLAND, Ore. - A new law enacted by the Oregon Legislature that takes effect Saturday will change the way auto insurance claims involving injuries and uninsured drivers are paid by insurers – and those changes could impact auto insurance rates, NW Insurance Council President Kenton Brine said Tuesday.
"Consumers should know that changes made to Personal Injury Protection insurance and Uninsured & Underinsured Motorist insurance – policies that all drivers must purchase, under Oregon law – could result in higher claims costs for insurers - costs that could ultimately be paid by insurance consumers, " Brine said.
In a Dec. 22 news release, the Oregon House Majority Office touted SB 411, passed earlier this year, as a law that will allow consumers "to receive up to the full amount" of their uninsured/underinsured motorist benefits" when the law becomes effective on Jan. 2, 2016.
The release urged consumers to contact insurers to "have their policies renewed or reissued effective January 2, 2016" to be sure their policies reflect changes in the law.
"What consumers may not know is the new law is anticipated to increase what insurers pay to settle claims – by as much as $85 million per year, " Brine said. The cost of settling claims is among the factors that determine the price consumers pay for auto insurance.
SB 411 changes requirements for two insurance policy types: Personal Injury Protection (PIP) and Uninsured/Underinsured Motorist (UM/UIM). Drivers in Oregon are required by law to carry at least minimum limits of both policy types, in addition to Liability insurance. (Drivers in Washington, Idaho and California are only required to have Liability insurance – the other coverages are optional.)
Under the new law, the benefit period for payment of PIP benefits has doubled from one year to two.
Also, non-economic damages (such as pain and suffering or other less "tangible" damages) must be paid up to the limits of the policy, where only payment of "actual" economic damages (such as loss of wages and the cost of medical treatment) were previously required.